2015-07-13

However, over the weekend the Greeks did unveil a plan, and Europe did as a whole vote in favour of it. So now the plan will be implemented put to more votes.

Greece won conditional agreement to receive a possible 86 billion euros ($95 billion) over three years. As part of the deal, euro zone finance ministers will discuss on Monday how to keep Greece financed during the time it will need to agree a bailout, but none of the options appear easy, officials said.

Athens must meet a tight timetable for enacting unpopular reforms of value added tax, pensions, budget cuts, bankruptcy rules and an EU banking law that could be used to make big depositors take losses.

German Chancellor Angela Merkel said she could recommend "with full confidence" that the Bundestag authorize the opening of loan negotiations once the Greek parliament has approved the entire programme and passed the first laws.

None of these upcoming votes are realistically going to be anything than a rubberstamp, of course, but it's worth noting the deal hasn't 100% been agreed to. The Germans can always vote against it and kill the deal, at least in theory. In practice, not so likely, since everybody seems to agree the deal is even worse than the ones the Greeks rejected. That's good news for the German taxpayer.

Europe had won and Germany "was part of the solution -- from the beginning until the end!"

But in Greece, relief was mixed with anger at Germany. "Listen, it is some sort of victory but it is a Pyrrhic victory because the measures are very strict," Marianna, 73, told Reuters.

Malta's Prime Minister Joseph Muscat said Greece had been “humiliated” - mostly as a result of its refusal to take an offer made to it two weeks ago.

Asked whether the tough conditions imposed on Greece were not similar to the 1919 Versailles treaty that forced crushing reparations on a defeated Germany after World War One, Merkel said: "I won't take part in historical comparisons, especially when I didn't make them myself."

The deterioration of the Greek economy since Tsipras won office in January, and particularly in the last two weeks, had led to a much higher financing need, she said.

For those looking for the nuts and bolts of the new deal, The Washington Post offers a decent summary. Basically, Greece agrees to a more Harper-like austerity plan than the Mulcair-like one that the voters rejected, including a boatload of privatization. In return, Europe gives Greece a ten billion euro loan so that the Grecians can pay the IMF back that money that they loan us.

This is good news to Canadian taxpayers.

However, Europe is going to be loaning Greece yet more money, and while that doesn't directly impact Canadians it does leave the European Union is a less stable financial situation that had they pruned their bad performing governments. That's good news for future Canadian tourists -- Europe isn't going to be as expensive as it could be -- but bad news for Canadians wanting to do business with a European Union that has tied yet more euros into bailouts and loan forgiveness and lost economic competitiveness that means your European customers aren't as solvent as you'd like people to be who could send you cash.

Ultimately though, Greece lost the showdown, and badly. They thought they could play cute with creditors, and were shocked to discover that when you don't have any money and instead owe billions, you don't hold any of the cards. This is good news for the Nikki Ashtons of the world, who were trumpeting the Greek referendum as a victory for democracy. As I wrote last week:

If this was a matter on a ballot box, you can bet I'd be proudly declaring on this blog how I'm totally opposed to enacting these legislations.

On the other hand, that's not just a matter of a ballot box. Whether you like it or not, these were the conditions placed on Greece by it's creditors. You know them, the people who lent you a shitload of money that you can't pay back? The Greek referendum wasn't so much asking what public policy you want your legislators to enact as much as it was you saying yes to the mob's demand that you help them rig a horse race or they come back and shatter your kneecaps and murder your grandma.